CES 2013: AT&T partners with Cisco for home-monitoring service

LAS VEGAS -- AT&T plans to kick off its Digital Life home monitoring service in eight U.S. markets in March, part of its efforts to expand wireless services beyond phones.

The No. 2 U.S. mobile service provider will offer subscriptions with protection from burglars to water leaks, and services including remote energy conservation for what it hopes will become a $1 billion business.

Since most people already pay for smartphone data services, operators including AT&T and its rivals Verizon Wireless and Sprint Nextel are seeking new ways to make money from wireless connections.

AT&T, which first demonstrated the service in May, said on Monday that users would be able to manage it from a Cisco Systems (CSCO) control panel at home or remotely from a smartphone or computer.

It announced its launch plan at its developer conference in Las Vegas a day before the Consumer Electronics Show officially opens and said it aims to expand beyond the initial markets to an additional 50 markets by the end of 2013.

Cisco CEO John Chambers told the audience at the event that AT&T is "two to three years" ahead of its peers in developing the service.

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The company also listed companies including Honeywell International and lock company Yale as partners.

IDC analyst Carrie MacGillivray said it makes sense for AT&T to look for revenue sources from its wireless network, but added that it would likely take the company a long time to build the business.

"I think its going to take a significant amount of time for consumers to buy into this story of extending AT&T's hold on the household beyond the cellphone," MacGillivray said.

At the event, the company also discussed efforts to provide wireless services such as navigation and back-seat entertainment to car owners as part of its effort to expand beyond phones.

AT&T expects home security and connected car services to attract different types of customers.

"Different customers are at different points," AT&T network technology executive Kris Rinne told Reuters at the event. "That's why we need to focus on multiple fronts."

IDC expects the entire market for cellular connections for devices beyond computers or phones to generate just under $1 billion by 2016 in the United States alone, according to MacGillivray.

Options for AT&T's home security system will include a video package, which includes the ability to view live video of the outside or inside of a subscriber's home, and an energy package, which allows remote control of lights, heating, air conditioning and appliances.

Another package will allow subscribers to remotely open their door for a pet-sitter or repairman or to check from afar if the doors are opened or closed.

Its water package could detect a water leak and shut of the supply before any flooding occurs. It did not disclose prices.

The security service requires AT&T to build monitoring centers, which will be staffed around the clock so it can respond to emergencies and notify the subscriber as well as police or firefighters.

The service will work on smartphones from rival services as well as devices connected to the AT&T network.